Was it an Error? by Edith Lank on Creators.com

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Making Lots on the Sale Dear Mrs. Lank: I've lived in my house for 32 years and want to sell this year. I am widowed and understand that I will have $250,000 that will not be taxed from the proceeds. Am I required to pay capital gains on a portion of the remaining monies? …Read more. Can't Kick Tenants Out Mrs. Lank: I am interested in buying a condo that is currently rented out. The seller says that the lease isn't up until for seven months and therefore I couldn't move in until then. If I bought this condo, would I be forced to become a landlord? Or …Read more. Did He Overpay? Dear Edith: I bought a house this summer, and in light of the National Association of Realtors' admission that they've been overstating home sales since 2007, I'm wondering if that faulty data may have made me overpay for my house. — L. Answer:…Read more. Low Down Payment Ms. Lank: How can I purchase an investment property without putting 20 percent down? I currently own my home. — email Answer: These days, lenders are being extra-careful, and they do require substantial down payments on non-owner-occupied …Read more.

Was it an Error?

Ms. Lank: You had a column about "Beware of scams with time shares." In your reply, the article stated: "Then call the real estate agents in those towns to see if they'd market them for a nominal price and 95 percent commission."

Is "95 percent commission" an error? What profit would there be for the owner? Why not give the property away since there seems to be no financial gain? — J.

Answer: Take another look at the item you're referring to. The owners of those two time shares weren't looking for financial gain. They had already failed in efforts to give the properties away. They said they were "ready to pay somebody to take them off our hands."

Many time shares work out just fine. Others don't. I mentioned several ways to try getting out from under, and one was enlisting the help of local real estate brokers. As there would be very little money involved, that would work only if the brokers could make enough to warrant spending the time and effort needed.

TRANSFERRING TO FAMILY

Mrs. Lank: My mother-in-law has a house that she is purchasing. Within the next five years, she is planning to move so she wants to turn over the house to us. When that time comes, what paperwork will be needed? What is the process? — S.C.

Answer: All your mother-in-law has to do is sign a deed turning over ownership to you. You become the new owners once the deed is entered in the county's public records. That part is simple and any lawyer can handle the paperwork.

But if there's a mortgage on the house, it might have to be paid off when your mother-in-law transfers the title. With FHA loans, VA and occasionally other types, the next owner can take over the mortgage after proving financial qualification. Otherwise, a mortgage loan would be called in during the change of ownership.

MUST TENANT LEAVE?

Ms. Lank: We are renting out our home. When we sell the house, at what point can the tenant be asked to leave? She has a one-year lease with us. — e-mail

Answer: In most cases, a lease "survives the sale" and is just as binding on the next owner as it is on you. There's always the possibility, of course, that your particular lease says something different.

OVER BUDGET PRICE

Dear Edith: I have fallen in love with a property, which is $100,000 over my budget price.

However, it has "in-law" quarters, which could be rented out for income. The in-law quarters are in a separate building attached to the property's three-car garage. Is a rental income worth the risk for a house that I love? How does financing work in a situation such as this? — e-mail

Answer: First find out whether local zoning regulations allow that apartment to be legally rented out. If it can, lenders will give you credit for anticipated rental income, allowing you to qualify for a larger mortgage.

Whether you want to become a landlord is another matter. It's easy for an amateur to get into trouble. And another caution — that sounds like a large older house with servants' quarters over the garage. This type of property may need expensive maintenance, so be sure to check the condition. Get a full report by a home inspector before any purchase contract becomes binding.

SELLING RAW LAND

Ms. Lank: I want to sell 0.78 acres of residential raw land in a good location, but I cannot get anyone to give me an honest price on what to sell this land for. What is the rule of thumb, if there are any these days, for a decent price to sell the land for? How much over the assessment can I ask? — C.

Answer: There's no point in using the tax assessment figure as a guide to pricing, sorry. The only thing that matters is what buyers have been ready to pay for similar property lately. If you can't find such "comparable" sales, you may have to experiment with price until you hit a level that attracts interest.

You don't say if you have consulted local real estate brokers — they will have the best advice and it won't cost anything to pick their brains.

LIVES WITH MOTHER

Ms. Lank: I am thinking about purchasing a home. I currently live with my mother. In 2008, she placed my name on a quick deed in case something happened to her. Does that disqualify me for the tax credit for home buyers? — e-mail

Answer: That quit-claim deed made you the owner of the house you live in, so you wouldn't be a first-time buyer. And you haven't owned it long enough (five out of the last eight years) to qualify as a repeat buyer, either.

Edith Lank will respond personally to any questions sent to her at 240 Hemingway Drive, Rochester, NY 14620 (please include a stamped return envelope), or readers may e-mail her at ehlank@aol.com.